Reliance Jio Following Flipkart Strategy - Trouble On The Way

Reliance Jio launched with fanfare pumping billions of $ in order to develop Mobile ecosystem around Jio network. Reliance is known for knocking their competitors through Money power. The exponential growth of data user in India offered huge opportunity to innovative brains to achieve their vision. We have seen Flipkart growing exponentially by pumping discount $ and user acquisition $ without working on right business model. Flipkart picked best talent available in different segment but failed to hold on as all are opportunistic including users. The day Flipkart tried to reduce the cost, they suffered.

In similar way, Reliance Jio is also offering month after month free service to their user in pretext that they will start charging once the call drop situation improve. Users are also very happy as they are carrying multiple SIM and accessing Jio service for free. It would be interesting to see the incurred cost of offered service by Jio to its esteemed user base. They claim that they have crossed 60 million but the way they distributed SIM force me to reserve my comment. We should focus that Incumbent operators like Airtel,Vodafone and IDEA is gaining user. After all userbase are same. Reliance jio is spending left and right to improve their brand recollection but again it will be interesting to see how user react once they start charging user base.

I won't be surprised that the kind of user base they acquired will be the first one to switch to another network as the same thing happened during Mobile Number Portability. If Jio is really gaining market share then they should release their number with COAI as well as tell the world the unique user registration based on unique Aadhaar card instead of distributed SIM. They should also release VLR active user base instead of keep throwing HLR registered user base. In my point of view, Reliance will continue to pour billions of $ in Jio to ensure that some of the Incumbent goes out of the ecosystem. They should understand that by doing so; they are hurting Reliance communications and Aircel the most and Reliance communications stability is very important for Jio to offer seamless services.

I wish them all the best of keep on buying userbase but feel sorry that they did not learnt from Flipkart as use case.

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Devendra Prasad

20 years plus industry veteran of domestic and international ICT domain with the expertise in Business, Technology, Strategy and Analysis. Specializes in forecasting impact analysis, trends and recommendations for Investments, Technology and Regulations.